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Should raphael make the purchase

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Reference no: EM133061307

Raphael Restaurant is considering the purchase of a $12,000 soufflé maker. The soufflé maker has an economic life of five years and will be fully depreciated by the straight-line method. The machine will produce 1,900 soufflés per year, with each costing $2.20 to make and priced at $5. Assume that the discount rate is 14 percent and the tax rate is 34 percent. Should Raphael make the purchase?

Reference no: EM133061307

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